Exam 10: Risk and Return: Lessons From Market History

A year ago,you purchased 300 shares of IXC Technologies,Inc. stock at a price of $10.05 per share. The stock pays an annual dividend of $.10 per share. Today,you sold all of your shares for $29.32 per share. What is your total dollar return on this investment?

In predicting the expected future return of the market,one of the dangers is that:

Excelsior share are currently selling for $25 each. You bought 200 shares one year ago at $24 and received dividend payments of $1.50 per share. What was your total rate of return?

Which one of the following is a correct statement concerning risk premium?

A stock had returns of 6%,13%,-11%,and 17% over the past four years. What is the geometric average return for this time period?

Suppose you have $30,000 invested in the stock market and your banker comes to you and tries to get you to move that money into the bank's certificates of deposit (CDs). He explains that the CDs are 100% government insured and that you are taking unnecessary risks by being in the stock market. How would you respond?

The average annual return on small company stocks was about _____ percentage points greater than the average annual return on large-company stocks over the period of 1926 to 2011.

Based on the period of 1926 through 2011,_____ have tended to outperform other securities over the long-term.

A stock had returns of 11%,1%,9%,15%,and -6% for the past five years. Based on these returns,what is the approximate probability that this stock will earn at least 23% in any one given year?

Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%. If the returns are normally distributed,the approximate probability of receiving a return greater than 32% is approximately:

What are the arithmetic and geometric average returns for a stock with annual returns of 4%,9%,-6%,and 18%?

Six months ago,you purchased 1,200 shares of ABC stock for $21.20 a share. You have received dividend payments equal to $.60 a share. Today,you sold all of your shares for $22.20 a share. What is your total dollar return on this investment?

A stock had returns of 8%,39%,11%,and -24% for the past four years. Which one of the following best describes the probability that this stock will NOT lose more than 43% in any one given year?

The return earned in an average year over a multi-year period is called the _____ average return.

On average,for the period 1926 through 2011:

What are the arithmetic and geometric average returns for a stock with annual returns of 5%,8%,-3%,and 16%?

The capital gains yield plus the dividend yield on a security is called the:

Winslow,Inc. stock is currently selling for $60 a share. The stock has a dividend yield of 2.5%. How much dividend income will you receive per year if you purchase 800 shares of this stock?

The standard deviation on small company stocks: I. is greater than the standard deviation on large company stocks. II) is less than the standard deviation on large company stocks. III) had an average value of about 33% for the period 1926 to 2011. IV) had an average value of about 20% for the period 1926 to 2011.

The returns on your portfolio over the last 5 years were -5%,20%,0%,10% and 5%. What is the standard deviation of your return?